An Evanston-based housing advocacy group has settled a claim against a nationwide property developer/manager.
As first reported last fall by Evanston Now, Open Communities sued Harbor Group of Norfolk, Virginia, and associated firms on behalf of Elizabeth Richardson, a Black woman who tried to rent an apartment at a Harbor-managed complex, Northgate Court in Wheeling.
The federal court suit alleged that Richardson was unfairly denied the chance to rent, because the property firm used an artificial intelligence (AI) bot to automatically reject all applicants who wanted to use a government Section 8 low-income housing choice voucher to help pay for an apartment.
But that’s only part of the complaint.
The end result of the denials, said Dominic Voz, of Open Communities, was that because a high percentage of Section 8 applicants are Black, Richardson included, there was a racially disproportionate impact of automatic rejections at Harbor properties, in violation of the federal Fair Housing Act.
Another defendant was PERQ Marketing of Indianapolis that supplied the AI system.
Last week, Open Communities and the defendants entered into a consent decree in federal court in Chicago. The decree stated that “The Harbor Group Defendants agree not to deny housing voucher applicants housing based solely on their source of income.”
The implications of this case go far beyond Elizabeth Richardson.
On its web site, Harbor says it “owns and manages 458 assets worldwide, 55,000 multifamily units,” plus commercial properties with “an aggregate gross asset value of approximately $19 billion.”
As part of the agreement, Harbor will report to Open Communities on voucher applications and denials not just in Illinois, but also in California, Colorado. Massachusetts, Maryland, New Jersey, Virginia and Washington for the next two years.
Also in the settlement, PERQ agreed that they will “not provide automated AI leasing assistance services to any of its clients that result in Bot responses that violate the FHA by automatically denying housing to housing choice voucher applicants ….”
Open Communities will also work with Harbor and PERQ “to craft appropriate AI-produced responses to inquiring tenants/prospective tenants regarding housing choice vouchers and/or other forms of income support.”
Open Communities will also produce or provide a fair housing training video for the defendants.
The consent decree said that any financial settlement will not be disclosed.
The settlement also stated the defendants do not admit any wrongdoing, that the agreement “does not constitute an admission of any of the allegations in the Complaint,” and was settled “solely to avoid the cost of additional litigation.”
As part of the deal, the lawsuit will be dropped.
Voz said, however, that it had impact.
“The point to drive home,” he said, “is making people understand the importance of disparate housing litigation”, and the impact that “source of income discrimination has especially on the Black community.”
As for Elizabeth Richardson … she lives somewhere else, and, Voz said, is “happy with the outcome” of the case.